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Sunday, February 19, 2017

Fee and Dividend: A Viable Solution?

In 2015, the
U.S. produced “12.7 million barrels of oil …[and] consum[ed] nearly 19.4
million barrels of oil per day” [1]. On
a global scale, “the oil industry is one of the most powerful branches in the
world economy” where more than “four billion metric tons of oil is produced
worldwide annually” [2]. Make no
mistake, the oil industry is an absolute juggernaut. From oil drilling to consumption, the demand for this resource is continually increasing
– and given the numbers, one can predict that this supply will be rapidly
decreasing.

Whether it
be ExxonMobil or the Dubai Petroleum Company, the lucrative rewards of the oil
industry are prevalent. In relation to
the global demand for oil, fields and other producing areas (worldwide!) are
continually targeted for drilling – regardless of how controversial they may be
(read Exxon’s controversial oil rig: http://www.ecowatch.com/exxon-starts-most-controversial-oil-rig-in-the-world-1881941134.html).
As journalist Nicole D’Alessandro puts it: “For the oil industry,
business comes first” [3]. Oil goliaths,
like ExxonMobil, have been notorious for putting profits above everything
else. Given this ideology, the question
of changing the oil industry becomes
that much more daunting.

So, how do
we stop this juggernaut? Perhaps the
question should not be about how to stop
them, but how we can better regulate
them.

The fee and dividend act proposed by Dr.
James Hansen aims to do just that. Dr.
Hansen proposes that a “’carbon fee with 100% dividend’ [should] [be] required
for reversing the growth of atmospheric CO2” [4]. Given this, the fee would also be “applied to
oil” [4]. It is touted as: “the most
simple method possible to reduce CO2 emissions, mov[ing] us toward renewable
sustainable energy and maintaining a functioning economy” [4]. In a nutshell, the proposal looks to hold
corporations accountable for the oil (as well as natural gas and coal) they
produce. By adding a fee on oil “at
their point of entry into the American Market (such as at an oil well)” will
inevitably trigger a “market-driven mechanism” [5].

The fee will
increase over time until “clean energy becomes cheaper to employ over fossil
fuels” [6]. The entirety of the fee paid by corporations would then be divided and
given as dividends (i.e. payout) to Americans (monthly). This would work to “offset the higher prices
households will pay from rising energy costs induced by the fee” [5]. Essentially, the aim of the proposal is to
let the people, not the government, dictate how they want to grow “America’s
energy economy” [5]. By doing so, the
hope is for Americans to spend their dividend income on “non-fossil fuel energy
sources” leading to “entrepreneurship and innovations [of] new industries…renewable
and fuel efficiency” [5]. Thus, creating
a new stream of jobs for the American public as well.

For more
information, please read the linked websites below. Although the proposal is currently aimed at
the U.S. (and Canada), the bill could be
applicable on a global scale, using the same structure. There are ongoing
efforts by advocates to pass this proposal through congress - and thereby changing the energy
policy in America. Grass-root activism
has played a major part, where petitions and other forms of activism are made
accessible (if interested, please refer to the links down below).

Is this a
viable option? Realistic? Would it
work? Could this proposal be applied to
other countries as well?